Millions of readers eagerly await Warren Buffett’s letter to investors because of its authenticity.

The shareholder letter from the CEO is often as exciting as a Sunday sermon: straightforward, dry, and stilted. The letter is a critical communication to those who have invested in the company, and it also has to pass muster with the SEC, so CEOs lean toward being conservative.  But Buffett proves that good writing is good writing, that techniques used in novels and Pulitzer-winning feature stories are also effective in business communication.

What distinguishes Buffett’s letter are his clear explanations of financial issues, his candor, his conversational tone, and his graceful sentences.

Consider this passage from one letter:

We continue to be blessed with an extraordinary group of managers, many of whom don’t have the slightest financial need to to work. They stick around though. In 38 years, we’ve never had a single CEO of a subsidiary leave to work elsewhere. We now have six managers over 75, and I hope that in four years that number will increase. Our rationale: It’s hard to teach a new dog old tricks.

My managerial model is Eddie Bennett, who was a batboy. In 1919, at age 19, Eddie began his work with the Chicago White Sox, who went to the World Series that year. The next year, he switched to the Brooklyn Dodgers, and they too won their league title, but our hero smelled trouble ahead. Changing boroughs, he joined the Yankees in 1921, and they promptly won their first pennant in history.

What does that have to do with management? It’s simple: To be a winner, work with winners. Eddie understood that how he lugged bats was unimportant; what counted was hooking up with the best performers on the playing field. I’ve learned from Eddie. At Berkshire, I regularly hand bats to many of the heaviest hitters in American business.

Here are techniques Buffett uses effectively:

  • Word choice. He shuns the use of buzzwords, cliches, and technical language.
     
  • Varied sentence length. In the first paragraph above, the first sentence contains 23 words, the second sentence, four. That kind of contrast provides a change of pace that lends a pleasant effect to the reading.
  • Variety in sentence structure. Not all sentences are subject-verb-object. Instead, he alternates with an introductory phrase or clause. That adds emphasis to the main clause, where the core thought is.
  • Use of first person pronouns – Using we, my, and I connects with the reader and lends a conversational tone to the writing.
  • Coherence. Paragraphs are unified around one theme, and Buffett provides markers that tell readers they are continuing on the same path. By opening the second paragraph with “My managerial model is … ,” Buffett signals to the reader that he remains on the topic of good management.  If readers wonder whether he has veered off on a baseball tangent in that paragraph, he pulls them back in at the start of the third paragraph with What does that have to do with management? And then he answers the question.
  • Comparisons. Buffett uses a baseball analogy to convey to readers that whether you are trying to succeed in business or baseball, it is important to work with top performers. Using analogies and other forms of comparison (metaphors and similes) to explain business concepts, processes, and products is immensely important to clear writing because readers can link the unfamiliar to the familiar.
  • Creativity. At the end of the opening paragraph, Buffett puts a fresh twist on the old phrase you can’t teach an old dog new tricks. Such originality lends a freshness and authenticity to his writing and makes it sound authentic.

 Never underestimate the power of the simple, declarative sentence, but business writing can be much more. The techniques above are some hallmarks of great writing, and there is ample opportunity to use them every day in the corporate world.